Islamic Finance

Islamic Finance

The range of financialtransactions that conform to the sharia, or Islamic law. Islamic finance forbids investment in industries considered sinful, notably alcohol, pornography and armaments. Islamic law also forbids the payment or receipt of interest. This forces credit to be either interest-free, or, more commonly, to take the form of a partnership or joint venture. For example, a bank could buy an asset for cash and then re-sell it to the "borrower" for a profit such that the profit is the same as the bank would have made had it extended a regular loan.

Islamic finance also forbids speculation. Thus, futures contracts and options are not permissible. These restrictions have made Islamic finance rather risk averse; it has a tendency to invest in fixed assets with an intrinsic value apart from the transaction. Critics within Islam claim that Islamic finance imitates conventional finance and therefore is not truly "Islamic." However, it became a major growth sector within finance in the early 2000s. See also: Sukuk, Murabaha, Mudharaba, Musharika.

Thomson Reuters and Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB), have released the key findings of the Islamic Finance Development Indicator (IFDI) Report 2015.

For all of the substance that Islamic finance provides, I can't tell you how many times I have had a conversation with a member of the Islamic financial community, from Africa to Indonesia, over the name 'Islamic finance'.

MANAMA: The CEO of Islamic Corporation for the Development of the Private Sector (ICD), Khaled Al-Aboodi, was awarded the prestigious "Islamic Finance Personality of the Year" for his outstanding contribution to the development of the Global Islamic finance industry.

MHBK Malaysia commenced business in September 2011 and obtained the approval from Bank Negara Malaysia, the central bank of Malaysia, to establish an international currency business unit to conduct Islamic finance denominated in currencies other than the Malaysian Ringgit in January 2012.

This rapid growth has led to a profound need for skilled Islamic finance professionals, as the World Islamic Economic Forum (WIEF) predicted that in the next 5-7 years the Islamic finance sector will require the addition of around 50,000 professionals.

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